Accenture Reports First-Quarter Fiscal 2024 Results

December 19, 2023

NEW YORK–(BUSINESS WIRE)–Accenture (NYSE: ACN) reported financial results for the first quarter of fiscal 2024 ended November 30, 2023. 

Julie Sweet, chair and CEO, Accenture, said, “I am pleased that we delivered on our commitments this quarter while strategically investing at scale for future growth. Our deep and trusted client relationships are again reflected in the 30 clients with quarterly bookings of more than $100 million. And we continue to lead our industry in Gen AI – the great accelerator of reinvention – with over $450 million in new bookings. I am incredibly grateful to the 743,000 people of Accenture, who are steadfastly dedicated to helping our clients achieve their ambition to grow and thrive in the years ahead.”

Revenues were $16.2 billion, an increase of 3% in U.S. dollars and 1% in local currency over the first quarter of fiscal 2023.

GAAP operating income was $2.56 billion, compared to $2.59 billion for the first quarter of fiscal 2023, and operating margin was 15.8% compared to 16.5% for the first quarter last year. Adjusted operating income was $2.70 billion and adjusted operating margin was 16.7%, an expansion of 20 basis points from the first quarter of fiscal 2023.

GAAP diluted earnings per share were $3.10, compared to $3.08 for the first quarter of fiscal 2023. Adjusted EPS were $3.27, an increase of 6% from the first quarter of fiscal 2023.

New bookings for the quarter were $18.4 billion, with consulting bookings of $8.6 billion and managed services bookings of $9.8 billion.

1Adjusted financial measures presented in this release are non-GAAP financial measures that exclude business optimization costs, as further described in this release.

Financial Review

Revenues for the first quarter of fiscal 2024 were $16.22 billion, compared with $15.75 billion for the first quarter of fiscal 2023, an increase of 3% in U.S. dollars and 1% in local currency.

Revenues for the quarter reflect a foreign-exchange impact of approximately positive 1.5% compared with the positive 2.5% impact previously assumed. Adjusting for the actual foreign-exchange impact, the company’s guided range for quarterly revenues was approximately $15.70 billion to $16.30 billion. Accenture’s first quarter fiscal 2024 revenues were at the top end of this adjusted range.

  • Consulting revenues for the quarter were $8.46 billion, flat in U.S. dollars and a decrease of 2% in local currency compared with the first quarter of fiscal 2023.
  • Managed Services revenues for the quarter were $7.77 billion, an increase of 6% in U.S. dollars and 5% in local currency compared with the first quarter of fiscal 2023.

GAAP diluted EPS for the quarter were $3.10 compared with $3.08 for the first quarter of fiscal 2023. Excluding a $0.17 decrease for business optimization costs, adjusted EPS were $3.27, an increase of 6% from the first quarter of fiscal 2023. The $0.19 increase in EPS on an adjusted basis reflects:

  • a $0.14 increase from higher revenue and operating results;
  • a $0.05 increase from higher non-operating income; and
  • a $0.01 increase from lower share count;

partially offset by

  • a $0.01 decrease from higher noncontrolling interests.

Gross margin (gross profit as a percentage of revenues) for the quarter was 33.6% compared to 32.9% in the first quarter of fiscal 2023. Selling, general and administrative (SG&A) expenses for the quarter were $2.74 billion, or 16.9% of revenues, compared with $2.59 billion, or 16.5% of revenues, for the first quarter of fiscal 2023.

GAAP operating income for the quarter decreased 1%, to $2.56 billion, or 15.8% of revenues, compared with $2.59 billion, or 16.5% of revenues, for the first quarter of fiscal 2023. Adjusted operating income for the quarter was $2.70 billion, or 16.7% of revenues, an expansion of 20 basis points from the first quarter of fiscal 2023.

The company’s GAAP effective tax rate for the quarter was 23.2%, compared with 23.3% for the first quarter of fiscal 2023.

GAAP net income for the quarter was $2.01 billion, compared with $2.00 billion for the first quarter of fiscal 2023. Adjusted net income for the quarter was $2.12 billion.

Operating cash flow for the quarter was $499 million, and property and equipment additions were $69 million. Free cash flow, defined as operating cash flow net of property and equipment additions, was $430 million. For the same period last year, operating cash flow was $495 million; property and equipment additions were $99 million; and free cash flow was $397 million.

Days services outstanding, or DSOs, were 49 days at November 30, 2023, compared with 42 days at August 31, 2023 and 48 days at November 30, 2022.

Accenture’s total cash balance at November 30, 2023 was $7.1 billion, compared with $9.0 billion at August 31, 2023.

New Bookings

New bookings for the first quarter of fiscal 2024 were $18.45 billion, a 14% increase in U.S. dollars and a 12% increase in local currency over the first quarter of fiscal 2023.

  • Consulting new bookings were $8.62 billion, or 47% of total new bookings.
  • Managed Services new bookings were $9.83 billion, or 53% of total new bookings.

Revenues by Geographic Market2

Revenues by geographic market were as follows:

  • North America: $7.56 billion, a decrease of 1% in both U.S. dollars and local currency compared with the first quarter of fiscal 2023.
  • EMEA: $5.80 billion, an increase of 9% in U.S. dollars and 2% in local currency compared with the first quarter of fiscal 2023.
  • Growth Markets: $2.86 billion, an increase of 2% in U.S. dollars and 5% in local currency compared with the first quarter of fiscal 2023.

Revenues by Industry Group

Revenues by industry group were as follows:

  • Communications, Media & Technology: $2.67 billion, a decrease of 10% in U.S. dollars and 11% in local currency compared with the first quarter of fiscal 2023.
  • Financial Services: $3.03 billion, an increase of 2% in U.S. dollars and flat in local currency compared with the first quarter of fiscal 2023.
  • Health & Public Service: $3.38 billion, an increase of 13% in U.S. dollars and 12% in local currency compared with the first quarter of fiscal 2023.
  • Products: $4.86 billion, an increase of 4% in U.S. dollars and 1% in local currency compared with the first quarter of fiscal 2023.
  • Resources: $2.28 billion, an increase of 7% in U.S. dollars and 6% in local currency compared with the first quarter of fiscal 2023.

Returning Cash to Shareholders

Accenture continues to return cash to shareholders through cash dividends and share repurchases.

2Effective September 1, 2023, we revised the reporting of our geographic markets for the movement of our Middle East and Africa market units from Growth Markets to Europe, and the Europe market is now referred to as our EMEA (Europe, Middle East and Africa) geographic market.

Dividend

On November 15, 2023, a quarterly cash dividend of $1.29 per share was paid to shareholders of record at the close of business on October 12, 2023. These cash dividend payments totaled $810 million.

Accenture plc has declared another quarterly cash dividend of $1.29 per share for shareholders of record at the close of business on January 18, 2024. This dividend, which is payable on February 15, 2024, represents a 15% increase over the quarterly dividend rate of $1.12 per share in fiscal 2023.

Share Repurchase Activity

During the first quarter of fiscal 2024, Accenture repurchased or redeemed 3.8 million shares for a total of $1.2 billion, including approximately 3.4 million shares repurchased in the open market.

Accenture’s total remaining share repurchase authority at November 30, 2023 was approximately $5.4 billion.

At November 30, 2023, Accenture had approximately 628 million total shares outstanding.

Business Outlook

Second Quarter Fiscal 2024

Accenture expects revenues for the second quarter of fiscal 2024 to be in the range of $15.40 billion to $16.00 billion, or negative 2% to 2% in local currency, reflecting the company’s assumption of a negative 0.5% foreign-exchange impact compared with the second quarter of fiscal 2023.

Fiscal Year 2024

Accenture’s business outlook for fiscal 2024 continues to assume that the foreign-exchange impact on its results in U.S. dollars will be flat compared with fiscal 2023.

For fiscal 2024, the company continues to expect revenue growth to be in the range of 2% to 5% in local currency.

Accenture continues to expect GAAP operating margin for fiscal 2024 to be in the range of 14.8% to 15.0%, an expansion of 110 to 130 basis points from fiscal 2023, and adjusted operating margin, which excludes an estimated $450 million for business optimization costs in fiscal 2024 and $1.1 billion in fiscal 2023, to be in the range of 15.5% to 15.7%, an expansion of 10 to 30 basis points from fiscal 2023.

The company continues to expect both its GAAP and adjusted annual effective tax rate, which excludes the tax impacts of business optimization costs, to be in the range of 23.5% to 25.5%.

The company continues to expect GAAP diluted EPS to be in the range of $11.41 to $11.76, an increase of 6% to 9% over fiscal 2023, and adjusted EPS to be in the range of $11.97 to $12.32, an increase of 3% to 6% over fiscal 2023. This excludes $0.56 for business optimization costs in fiscal 2024 and $1.28 for business optimization costs and $0.38 for a gain on an investment in fiscal 2023.

For fiscal 2024, the company continues to expect operating cash flow to be in the range of $9.3 billion to $9.9 billion; property and equipment additions to be $600 million; and free cash flow to be in the range of $8.7 billion to $9.3 billion.

The company continues to expect to return at least $7.7 billion in cash to shareholders through dividends and share repurchases.

360° Value Reporting

Accenture’s goal is to create 360° value for our clients, people, shareholders, partners and communities. Our reporting captures how we deliver unique value across six vital dimensions and offers a comprehensive view of our financial and environmental, social and governance (ESG) measures, and our goals, progress and performance for each. Our full 360° Value Report and online 360° Value Reporting Experience provide customizable reporting. To access, please visit the Accenture 360° Value Reporting Experience at www.accenture.com/reportingexperience.

About Accenture

Accenture is a leading global professional services company that helps the world’s leading businesses, governments and other organizations build their digital core, optimize their operations, accelerate revenue growth and enhance citizen services—creating tangible value at speed and scale. We are a talent- and innovation-led company with 743,000 people serving clients in more than 120 countries. Technology is at the core of change today, and we are one of the world’s leaders in helping drive that change, with strong ecosystem relationships. We combine our strength in technology and leadership in cloud, data and AI with unmatched industry experience, functional expertise and global delivery capability. We are uniquely able to deliver tangible outcomes because of our broad range of services, solutions and assets across Strategy & Consulting, Technology, Operations, Industry X and Song. These capabilities, together with our culture of shared success and commitment to creating 360° value, enable us to help our clients reinvent and build trusted, lasting relationships. We measure our success by the 360° value we create for our clients, each other, our shareholders, partners and communities.